CMS noted that coinsurance amounts, deductibles, and premiums for Medicare Parts A and B are adjusted each year in accordance with the Social Security Act.

Medicare Part A changes

CMS said about 99% of Medicare beneficiaries do not have to pay premiums under Medicare Part A because their employment history qualifies them for full Medicare benefits. Individuals must work at least 10 years, or 40 quarters, and contribute Medicare taxes to qualify for full Medicare Part A benefits at age 65. However, beneficiaries older than 65 who have fewer than 40 quarters of Medicare-covered employment, as well as certain beneficiaries with disabilities, must pay monthly premiums to enroll in Medicare Part A. In such cases, the monthly premiums for 2020 will be:

$252, up $12 from 2019, for individuals with between 30 to 40 quarters of Medicare-covered employment or who are married to someone with between 30 to 40 quarters of Medicare-covered employment; and

$458, up $21 from 2019, for individuals who have fewer than 30 quarters of Medicare-covered employment and certain disabled individuals "who have exhausted other entitlement."

In addition, CMS said the Part A deductible for hospital inpatient care will rise by $44, from $1,364 for the 2019 coverage year to $1,408 for the 2020 coverage year.

CMS explained that the inpatient hospital deductible covers a beneficiary's share of the costs for being admitted to a hospital for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. After those 60 days, beneficiaries must pay coinsurance.

According to CMS, those coinsurance amounts will be:

$352 per day for the 61st day through to 90th day of hospitalization in 2020, up from $341 per day in 2019; and

$704 per day for lifetime reserve days in 2020, up from $682 in 2019.

For beneficiaries in skilled nursing facilities, CMS said the daily coinsurance requirements for days 21 through 100 of extended services during a benefit period will be $176 in 2020, up from $150.50 in 2019.

Medicare Part B changes

CMS said the monthly standard Part B premiums will increase by $9.10 for the 2020 coverage year, rising from $135.50 for 2019 to $144.60 for 2020, though the agency added that premiums will vary based on beneficiaries' incomes. Specifically, the monthly Part B premiums for the 2020 coverage year will be:

$144.60 for individual beneficiaries with annual incomes up to $87,000;

$202.40 for individual beneficiaries with annual incomes of $87,001 to $109,000;

$289.20 for individual beneficiaries with annual incomes of $109,001 to $136,000;

$376 for individual beneficiaries with annual incomes of $136,001 to $163,000;

$462.70 for individual beneficiaries with annual incomes of $163,001 to $500,000; and

$491.60 for individual beneficiaries with annual incomes of $500,001 or more.

However, some Medicare beneficiaries will pay less than the standard monthly premium rate for Medicare Part B in 2020 because of the statutory hold harmless provision, which limits premium rate increases to an amount no greater than the increase in Social Security benefits for certain beneficiaries. According to CMS, 7% of Medicare beneficiaries will be affected by the higher premiums rates for 2020.

CMS also noted that the annual deductible for all Part B beneficiaries will increase from $185 for 2019 to $198 for 2020.

CMS said the growth in Part B's deductible and premiums largely stemmed from increased spending on physician-administered drugs. "These higher costs have a ripple effect and result in higher Part B premiums and deductible," the agency said.

CMS said President Trump "is working to lower drug prices in Medicare Part B" through proposals included in his drug pricing blueprint.

Reaction

Fred Riccardi, president of the Medicare Rights Center, said the increases in Medicare Parts A and B coverage costs could pose a hardship for some seniors. "For people who live with little to no savings, any increase in Medicare premiums or drug costs is going to be a struggle," he said (Livingston, Modern Healthcare, 11/8; CMS fact sheet, 11/8; Ebeling, Forbes, accessed 11/11; Tyko, USA Today, 11/9; Medicare.gov, accessed 11/12).

Health Insurance 101: Get the slide decks

Confused about the U.S. health insurance system? You're not alone—it's one of the most complicated systems in the world. If you missed our recent webconference series diving deep into the system, don't worry; we've got you covered.

Review the slide decks from our recent webconferences for a quick overview of each program: